The number one trade in the hedge fund world now is to borrow in euros and get long US equities. This trade is working like a charm, but poses a significant future headwind–should the current trend reverse. For example: if the euro spikes higher, these riverboat gamblers are going to be forced to sell their JNJ and DIS, in order to pay back their loans. There are certain risk thresholds that will need to be adhered to.
Also, should US markets drop, precipitously, euro fuckers will find themselves in the unenviable position of being fucked.
But, for now, everything is working out, rather stupendously. After all, what could go wrong?
As it stands now, the fate of western finance, and all corridors of the civilized world, hangs in the balance. This is a balance that is very much interested in knowing if Janet Yellen is “patient” or not. If we find out this Wednesday that she is not, in fact, patient, hell will break loose and 66 seals of hell will be broken–paving way for actual centaurs to roam Wall–kicking people in the faces with their hooves.
On the other hand, if Janet is patient and says so, we’re all going to make an absurd amount of money.
To celebrate this future occurrence, I am prepared with corked bottles of champagne and jumping jacks. Upon my success in the capital markets, “The Fly” will travel down to Wall in his 1980’s style stretch limo, roll down the windows, and begin popping corks into the faces of pikers who pass by. After I am done, I will toss out a flaming cardboard box, with Blustar’s skull inside of it, wrapped in a dozen or so jumping jacks, for the kids. You know, they like to see the vibrant colors, and all.
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Governments, corporations, trillions of dollars of debt is taken out by real money… who now need to hedge.
Forget the small hedgefunds who are short EUR
my hedgefund, roughly $5K IS SHORT EURO!
Such a human flaw thinking that everyone pretending they have lots of money when it’s really owed-money
“Italian Bad Debt Hits Record $197 Billion As Bank Lending Contracts For Unprecedented 33 Consecutive Months”
I hop she is patient. (extra easter)
They must buying the DAX and Nikkei also. Never have seen such a difference in performance country by country. For every country going parabolic there is one basically crashing.
public gets headlines: stock market good day europe japan strong days, just completely programmed, it’s so fake
“Meet The Relentless, Mystery Buyer Of Chinese Stocks Even As China’s Economy Grinds To A Crawl”
Borrow in euros and buy treasuries.
Borrow in BitCoin and go long ibankcoin exodus.
thats a trade for the books there!
Perhaps the dollar is already pricing in the change of fed language?
Blue is the new whipping boy
Popping champagned cork into a persons face is the #1 pastime of iBankCoin.
I thought slapping people in the face with hot slices of pizza was… Times change I guess
That was back in the old days when I ran an office. Now I am plagued by Mrs Fly.
Geeez that was funny.
We’re Not Worthy.
Great read.
The FED isn’t raising rates. In fact we are headed right for QE4 within 1 year from now. The only thing that would send markets down on Wednesday would be an actual rate increase. The absence of the word “patient” has already been priced in. We rip higher and soar right into May. A correction is coming in October, but not before we explode the corpses of all remaining bears.
Bears are pretty happy actually
“US Economic Data Is Having Its Worst Year Since At Least 2000”
With everything they have done, Everything, This is your current result. Very Satisfying (licking lips)
Here’s hoping George celebrates St. Paddy’s Day by popping a Viagra,painting his member green and giving it to Ms. Yellen good.
The ‘ol bat is going to imply raising rates but not actually do it. She doesn’t want to admit that inflation is not up to par. As such, the market will take her at her word, not her action.
Jumping Jacks symbolizing the “fireworks” of a blowoff top I surmise.
Actual Centaurs!! I shouldn’t laugh, my account is 97% long now. Weeeee.
I’d like to partake in such acts befitting only of a gentleman, cut from the cloths of wolves. We can be stretched with the finest Walled street boozies and floozies.As we make our presence know to all who dare to acknowledge in this canyon of financemen & sheeps
Were not gonna take it
Were not gonna take it
Babyboomers better take it before they dieoff
Happy St. Paddy’s and the makin’ a the green.
So if hedge funds borrow euros and convert them to dollars, and buy US equities, they are counting on the dollar appreciating so they can pay the loan back with cheaper euros right? And if Janet then says she isn’t patient anymore, that means higher interest rates and a higher dollar against the euro, correct? Don’t see how a hawkish Fed is bad for the carry trade you described.
Signal a raise? I would be shocked. The fed never disappoints the market.